Utilities and Blockchain Pilots - A Global Snapshot

As we enter the final months of 2016, it is becoming clear that the potential of blockchain in the energy and utilities industry could be vast. Indeed, this year alone saw a host of utilities engage with the technology and launch pilots globally. In July, Indigo Advisory Group highlighted the activities of several blockchain startups in the energy and utilities industry and worth noting at this stage, is that utilities are increasingly partnering with those companies to undertake innovative pilots.

Utilities Experimenting with Blockchain Globally

In our Utility Blockchain Pilot Snapshot graphic below we highlight six power companies that are all investing in the technology and trialing new use cases. These companies include, Vector in NZ, Alliander in Holland, Marubeni in Japan, RWE / innogy in Germany, Wien Energie in Austria, and Fortum in Finland. Presently, the EU is the most active region globally, where a vibrant ecosystem of vendors and progressive utilities are jointly exploring applications. Pilots range from P2P trading, IOT appliance level control, and bitcoin enabled bill-pay. Ethereum remains the most widely used blockchain platform in the industry.

While it is still early days for blockchain and while pilots at this stage are contained, the possibilities of leveraging P2P technology where both computers and people share a distributed ledger are vast. In the future, networks of blockchains may interact over time to fundamentally change the market. This journey may begin with community P2P markets, transactive home energy management and EV charging settlement, however, over time, we may see parts of the utility value chain impacted with transactive grid settlement, real-time asset valuation and products designed utilizing smart contract functionality. Ultimately, considerations regarding the design of actors and the role of balancing groups and the development of a carbon market with distributed registry may be a reality enabled by blockchain. To this end, hundreds of market process and processes internal to a utility would need to be reexamined.

It is also important to highlight that a technological handshake may occur between the advancement of blockchain in the industry and the existing developments in utility analytics, distributed energy resources penetration and distributed intelligence device deployments. Blockchain may provide the prefect unifying platform for these technologies (for more detail on utility analytics use cases see our UtiliAPP resources). In this sense, as utilities increasingly improve their situational awareness across the network and as predictive and control algorithms further develop, barriers to deployments may lower. In the chart below we highlight over time how a series of blockchains may interact with DER penetration and enhanced utility automation to facilitate the journey towards transactive energy.

A Blockchain Enabled Transactive and Dynamic System

Blockchain in the Energy and Utilities industry in 2017

In addition, to the utility pilots highlighted in our Utility Blockchain Pilot Snapshot, other non-piloted use cases are also garnering interest across the value chain. In 2017 we expect to see those in the industry to look to blockchain technologies not just for P2P sharing and payment options, but also for possible asset management and optimization use, the trading of certificates (CO2-allowances, proof of origin for renewable energy) and clearing and settlement at the system operator level. In a similar vein, we also expect to see much more collaboration in the connected home space with blockchain based companies partnering with app developers and consumer appliance manufactures to accelerate IOT efforts. Finally, in 2017, as certain use cases become more tangible and as interest in other industries accelerates we expect to see much more activity in the form of pilots from utilities in North America.

*This graphic has been updated due to notable pilots that represent blockchain in the energy and utilities sector more broadly, Vattenfall has been replaced by Alliander and Wanxiang has been replaced by Wien Energie.